A recent case decided by the Small Business Administration’s Office of Hearings and Appeals could open the door—at least a tiny bit—to overcoming the agency’s longstanding practice of prohibiting nearly all second jobs for owners of 8(a) small, disadvantaged businesses.

Under the 8(a) rules, business owners must demonstrate “full time devotion” to running the business. Even so, many owners have expressed interest in outside employment.

The SBA historically has been very reluctant to permit second jobs for 8(a) business owners and applicants, according to Steve Koprince, partner at the Petefish, Immel law firm in Lawrence, KS.

“Any second job is suspect, including a part-time job,” Koprince told Set-Aside Alert in an interview. “A full-time second job is an automatic ‘no.’”

But a recent case before the SBA’s hearings office may cause a small revision of those practices, Koprince said. There may be more leniency in cases where the applicant can demonstrate that the outside employment will not interfere with managing the 8(a) firm full-time during normal working hours.

The case in question ( BDS Protective Services, LLC, SBA No. BDP-433 (2012) ) involved the 8(a) program application of BDS Protective Services, a security services firm owned by Jeffrey Jackson since 2002.

In addition to running BDS, Jackson was a full-time employee of the U.S. Government Printing Office since 1998, working from 11:30 p.m.to 8 a.m. on weekdays.

In his 8 (a) application, Jackson said he worked full-time for BDS, consisting of eight hours per day Saturday and Sunday, and 9 a.m. to 2 p.m. each weekday.

The SBA denied BDS’ 8(a) program application, asserting the “full time devotion” requirement was not met and his GPO work schedule would detract from his ability to manage BDS full-time for eight hours each weekday.

SBA Office of Hearings & Appeals ruling: “Normal working hours” can vary by industry

The SBA’s hearings office disagreed, saying the 11 p.m. to 8 a.m. second job did not preclude being available during normal business hours. The office said SBA regulations allow for flexibility by industry, and do not require “normal working hours” to be eight hours each weekday.

Also working in Jackson’s favor was that he held the GPO job for 13 years while BDS was growing in revenue.

“This (decision) might give more leeway to hold a second job, provided the applicant can demonstrate it doesn’t interfere with full-time devotion,” said Koprince. “My hope is that the SBA will be a little looser and make a case-by-case judgment, based on the hours and the industry involved.”

For more information:
http://smallgovcon.com/sbaohadecisions/8a-program-and-outside-employment-sba-oha-holds-applicant-may-work-second-full-time-job/